€300m Russian waste PPP achieves close

Commercial close has been reached on the design, construction, financing, maintenance and operation of the Yanino waste processing plant in Saint Petersburg. The 30-year concession agreement signed by subsidiaries of Greek construction group Ellaktor is one of the first Russian PPPs to close outside the transport sector.

A joint venture led by Greek construction firm Ellaktor Group – and including its subsidiaries Helector and Aktor Concessions – has reached agreement with the Government of Saint Petersburg for the design, construction, financing, operation and maintenance of a waste processing plant in the Yanino area of the city.

The plant, which is expected to see a total investment of €300 million, will be constructed over the next four years – including time taken to acquire a licence and for a trial operation – after which a concession contract takes effect for the following 30 years. 

According to a statement, the plant will process 350,000 tons of composite waste per year. 

An investment return will be made from the waste processing fee and income from selling recycled materials and energy. Plus, in what is the first de facto Russian public-private partnership (PPP) to receive a form of availability payment, a guaranteed fee will be paid per processed ton, consisting of the approved tariff plus the investment component. In addition, the city is guaranteeing waste volume (but not composition). 

The project is the first waste PPPs to reach commercial close in Russia. Until now, the country – and the city of Saint Petersburg in particular – has been mostly associated with transport PPPs such as Pulkovo Airport and Orlovsky Tunnel. 

The city was advised on the project by consultants Arup, law firm DLA Piper and investment bank VTB Capital. 

*The June 2011 issue of Infrastructure Investor will include a regional report on Russia and Central and Eastern Europe.